CHICAGO — The Millennial generation is the fastest-growing segment of auto-loan consumers, debunking a widely held belief that younger consumers are shunning car purchases, according to a new study from TransUnion.
The credit reporting firm's latest quarterly auto-loans report found that Millennials, those born since 1981, have increased their total outstanding auto-loan balances by 23 percent in the past year, the biggest jump of any age group. Their average opening loan balances grew by 4.1 percent in 2014, up to $18,678 from $17,942 in 2013.
Millennials now account for 27 percent of total vehicle-loan originations, compared to 16 percent in 2009.
"The growth in Millennials' auto-loan originations dispels the common myth that Millennials are not buying cars," said Jason Laky, senior vice president and automotive business leader for TransUnion, in a statement. "The growing average-loan balances for Millennials, combined with stable delinquency rates, indicate that we are still in the midst of a strong auto-lending environment."
The TransUnion findings echo an earlier MTV study, which, as reported by Edmunds, determined that eight in 10 Millennials surveyed viewed cars as the one big-ticket item people of their generation purchase. In fact, the study found that Millennials equate their cars to their phones when it comes to social connections.
And what kinds of vehicles are the Millennials buying?
According to a recent report from J.D. Power, the compact and small vehicle segments account for almost half of their purchases. So models that would suit them might include the Chevrolet Cruze, Ford Focus, Honda Fit, Kia Soul, Toyota Corolla and Volkswagen Golf.
Edmunds says: It appears that the Millennials aren't as auto-averse as we had previously been led to believe.